signs of strength, page-9

Gold is recovering. Currently US794.00.

PRE has held up well. PRE looks set for a large price move over the medium term in conjunction with its continuing to prove up more gold and a rising gold price.

This price move will surprise most here imo. I have already gone on record here as predicting 25c. (Not prepared to post a higher price here.)

Nothing goes up in a straight line. In a bull run huge moves always have sharp corrections within in them before the stock goes on to new highs.

How many investors in PRE will get set for the first time near the top of every huge leg up and then bag the stock when it sharply corrects, sell out near the bottom of this correction, and watch PRE take off on them again?

I bet plenty.

The way to play PRE imo is to take a position in the stock understanding why you are getting into PRE:

1. Its huge exploration upside as it proves up more gold.
2. Gold is in a generational bull market.

Then you either ride PRE out through the swings until the gold price goes absolutely ballistic at which time everyone will want to get into PRE at a price many multiples of today's prices. I'm thinking of US$1500 plus. Then you start selling out.

Alternatively when the stock has a significant run you sell a few into strength (25% to 35%) aiming to buy these back when PRE corrects to a lower price. Not as easy as it seems, but it can be done imo using a number of technical analysis tools and paying close attantion to power uptrends and power downtrends. Occasionally though you may need to buy back a little higher than when you sold.

'... I can’t think of a better time to buy juniors; it is one of the very best times. I think the best time was at the bottom in 2000 and 2001. But given where the gold price has come and the way some of these juniors are trading, I think we’re being presented with another unbelievable opportunity.'

http://www.kitco.com/ind/GoldReport/dec032007.html